Dutch M&A update 2015 Full Year Analysis. Deal Advisory - Corporate Finance

Transcription

1 Dutch M&A update 2015 Full Year Analysis Deal Advisory - Corporate Finance

2 KPMG s update on the dutch M&A market Status of the global and European M&A market The Dutch M&A market Outlook The overall improvement in the economy has been reflected in global M&A volumes, which reached an all time high since 2007 with a total of 17,425 announced. The European M&A activity is at par with 2014 volume (6,805 transactions in 2014 versus 6,766 in 2015) and slightly below the deal pre-crisis deal volume from In terms of deal value, an increase has been witnessed across all geographies. In addition, the EV/EBITDA multiples have also increased, which can be explained by the availability of inexpensive funding (low interest rates as a result of monetary policies by the ECB and the FED) and the strong balance sheets of large corporates. In 39% of all recorded, a European target or buyer was involved, underlying the fact that Europe continues to play an important role in global M&A activity. Within Europe, more than 60% of transactions concerned a European target and European buyer. In total 1,369 transactions (20%) involved a European target and non-european buyer, in 16% of the transactions a European buyer acquired a non-european target. This continues the 2011 trend that Europe was a net seller of companies for The Dutch M&A market has shown a decline in transaction volume of c. 1% compared to 2014, which is slightly below the global and European markets. The majority of the transactions are undertaken by corporates (381 of the 556 transactions, or 69%), whereas 31% (175 transactions) in the Netherlands involved a financial investor. Financial investors have been active in both acquiring and divesting portfolio companies in The number of exits was roughly on par with the number of entries. In 2015, 11% of transactions that involved a financial party (20 transactions) involved the sale of a company by a financial investor to another financial investor (so called secondary ). With a total of 556 transactions, the Dutch market, measured in volume, accounted for circa 3% and 8% of the global and European markets, respectively. Market appetite and capacity (as defined as the ability and willingness to engage in M&A) of the world s largest companies are both increasing according to KPMG s M&A predictor. Furthermore, drawing on the KPMG US M&A Outlook survey 2016, companies will investigate on M&A strategy as they continue to look for new markets to enter and strive to expand their customer base or geographical reach. However, the recent increased volatility of global equities, fuelled by a slowdown of the Chinese economy, the increasing US interest rates and low oil prices is starting to influence perceived transaction risk amongst dealmakers. As a result of these murky environmental conditions, it is hard to present an unambiguous outlook on the M&A market. North America was most often involved in European that concerned a non European buyer or seller.

3 M&A market snapshot Global EU - 28 The Netherlands H Financial and strategic # of (1) Deal value (EURbn) 17, % 6, % 3, % 1, % % 252.0% (2) Financial as percentage of total # financial investor Financial investors - value 24.3% 27.9% 18.0% 23.2% 31.5% 18.8% Median EBITDA multiple 11.1x 10.3x 11.2x MSCI All Country World index Eurostoxx 50 index AEX index Forward PE multiple 2016 (3) 14.7x 12.8x 16.0x Forecasted GDP growth (2016) 2.6% 1.8% 2.1% Total stock market return 01/01/ /12/ % 17.7% 22.6% Sources: MergerMarket, Bloomberg, Economist Intelligence Unit. Deal activity figures based on MergerMarket data available per 28/01/2016, based on announced, excluding IPOs Note (1): A deal is defined as the sale of a target in a specific region or the acquisition of a company by a bidder from that specific region Note (2): Increase in value is distorted by three of EUR >10m each, (the Shell bid for BG (EUR 74.5bn), the NXP Semiconductor takeover of Freescale (EUR 14.3bn) and the Ahold/Delhaize merger (EUR 10.6bn)) Note (3): Data per 04/02/2016

4 Global and European M&A market The global and European M&A markets are back at their pre-crisis levels in terms of volume Deal volumes measured worldwide and in Europe are at their pre-crisis levels. Globally, were up 0.1% comparing to 2014 while in Europe total deal volume declined by 0.6%. Global Europe Number of per type Number of per type 16,095 13,162 9,885 12,523 13,470 13,881 14,592 17,400 17,425 6,973 5,832 3,854 5,048 5,712 5,562 5,886 6,805 6,766 Strategic Financial 2014: 0.1% Strategic Financial 2014: (0.6%) In line with the stock market developments, recorded deal value has steadily increased over the last three years both in the global and European markets, respectively. World market index vs. Global deal value MSCI ACWI total return (indexed, 2007=100) 200 Deal value EURbn Eurostoxx 50 index vs. European deal value Eurostoxx 50 total return (indexed, 2007=100) 200 Deal value EURbn ,687 1,598 1,214 1,579 1,633 1,795 1,667 2,484 3,861-1, ,160 Global deal value MSCI ACWI European deal value Eurostoxx 50 Source: Note: MergerMarket, based on recorded deal value Deal activity measured as bidder or target in the EU-28 area

5 European M&A market Europe accounts for circa 39% of global M&A activity (1) European involvement in global M&A activity All other 61% 39% EU Deals Europe s role in the transaction (target/buyer) Non- EU/EU 16% 64% EU/EU Europe remains a pivotal region in the global M&A market, involved in c. 39% of all announced in The majority of the transactions are undertaken where target and buyer are both European. Of all European transactions, 20% involved a European target and non-european buyer (export). In 16% of the transactions a European company bought a non-european party (import). This continues the 2011 trend that Europe was a net seller of companies for North America was most often involved in European that concerned a non European buyer or seller. 17,425 Development of Europe s role in transactions Net import (12) (65) (163) (256) (317) 971 1, , , , , ,387 1,131 1,369 1,052 EU/ Non-EU 20% 6,766 Origin of Europe s trade partners Origin of the buyer acquiring an European target ROW 23% 1,369 North America 56% Origin of the target acquired by an European buyer ROW 39% 1,052 North America 43% Import (non-european target, European buyer) Export (European target, non-european buyer) 21% Asia 18% Asia Note (1): Measured by number of transactions during 2015

6 Dutch M&A market The Dutch M&A market has been stable in volume terms but showed a significant increase in value terms Europe Number of per type 6,973 5,832 5,048 5,712 5,562 5,886 6,805 The Netherlands Number of per type , , Dutch deal volume was on the same level as 2015 but total deal value has significantly increased, demonstrating the improved M&A climate. Strategic Financial 2014: (0.6%) Strategic Financial 2014: (1.1%) EV/EBITDA multiples have shown a steady increase since The median Dutch EV/EBITDA multiple in 2015 was slightly larger than the median European multiple. Price levels Median EBITDA multiples AEX index vs. Dutch deal value AEX total return (indexed, 2007=100) 200 Deal value EURbn Deal value in the Netherlands has shown a sharp increase in 2015, although this is mainly explained by three transactions of >EUR 10bn each. (1) 11.5x 11.0x 8.9x 10.1x 7.6x 8.8x 9.4x 9.5x 10.7x 9.6x 8.2x 9.1x 7.4x 9.3x 9.4x 9.9x 11.2x 10.3x Dutch European Dutch deal value AEX Source: MergerMarket, based on recorded deal value Note: Deal activity measured as bidder or target in the Netherlands Note (1): Shell bid for BG (EUR 74.5bn), NXP Semiconductor takeover of Freescale (EUR 14.3bn) and the Ahold/Delhaize merger (EUR 10.6bn)

7 Dutch M&A market Corporates account for 69% of all in the Dutch M&A market (1) Split by type of deal Financial 31% 69% Strategic Geographical split of Dutch corporate (target/buyer) NL/ Non NL 34% 31% NL/NL In 2015, 381 transactions were undertaking by corporates. This accounts for around 2/3 of the total market and is in line with the global and European market % Non NL/NL Dutch buyers are most acquisitive in their own country, followed by other EU members. The origin of the target acquired by a Dutch buyer ( import ) ROW Asia North America 9% 4% 10% 48% 252 NL The origin of the buyer acquiring a Dutch target ( export ) ROW Asia North America 15% 5% 48% 4% 249 NL Other EU 29% Other EU 28% Note (1): Based on the number of transactions

8 Dutch M&A market Financial investors continue to play an important role in M&A Split by type of deal Strategic 69% 31% Financial Financial split by type of deal Secondary 11% 46% Entry In 2015, 175 financial transactions have been announced in the Netherlands. In 30% of the financial transactions, a Dutch corporate was acquired by a financial investor for the first time (entry). In 2015, Dutch financial buyers have acquired a total of 27 companies abroad. Since 2007, Dutch financial investors have not made so many foreign entry investments. 556 Exit 43% 175 There were 75 transactions in which a financial investor sold a target to a corporate (exit). Foreign corporates accounted for the majority of the exit. This illustrates the role private equity can play in helping companies with their international expansion or transition process. Entry: Origin of the target Total Entries % 20% 20% 24% 23% 30% 30% 26% 34% 86% 78% 80% 80% 76% 70% 70% 74% 66% Exit: Origin of the buyer Total Exits % 29% 37% 36% 38% 37% 35% 45% 56% 71% 71% 65% 64% 63% 62% 63% 55% 44% NL Non-NL NL Non-NL Classification of financial : Entry Financial investor acquires a portfolio company from a strategic party Exit Financial investor sells a portfolio company to a strategic buyer (excluding IPOs) Secondary Financial investor sells a portfolio company to another financial investor

9 About KPMG Deal Advisory Corporate Finance With over 2,500 corporate finance professionals in 84 countries working from 174 offices across the world KPMG Deal Advisory is one of the leading advisors and we consistently rank in the top 3 of advisors by number of globally. We distinguish ourselves by our global reach and deep sector EMEA Recorded 264 M&A in 2015 worth USD 17,829m ,736 expertise in combination with local presence and an integrated deal advisory offering consisting of M&A, capital structure, valuation, due diligence, and integration and separation advice. In the Netherlands our practice consist of 74 professionals Asia Pacific Recorded 103 M&A in 2015 worth USD 18,162m and we serve a broad clientele of listed and private corporate clients, financial investors, as well as governmental institutions. Americas Recorded 103 M&A in 2015 worth USD 10,049m Professionals Offices Countries A selection of recent accomplishments include: acted as exclusive financial advisor to shareholders and management on the sale of ACL Airshop to Ranger Aerospace acted as exclusive financial advisor to N.V. Bank Nederlandse Gemeenten regarding the sale of BNG Vermogensbeheer B.V. to a.s.r. acted as the exclusive financial advisor to the shareholders of Van Gansewinkel Groep B.V. on the sale of SAS Van Gansewinkel France to SAS Paprec Group KPMG Deal Advisory acted as financial advisor to Ballast Nedam N.V. on its restructuring, refinancing and subsequent recommended public offer by Renaissance Construction acted as financial advisor to the shareholders of The Medical Export Group on the sale of the company to Foreman Capital acted as the exclusive financial advisor to Van Lanschot Bankiers on the sale of its non performing commercial real estate loan portfolio to Cerberus Capital Management KPMG Transaction Services acted as the exclusive financial advisors to the shareholders of Argos on the merger with Varo Energy acted as the exclusive financial advisor to the shareholders of Stork Food & Dairy Systems on the sale of the company to JBT Corporation from the United States February 2016 January 2016 December 2015 December 2015 September 2015 September 2015 September 2015 July 2015

10 KPMG For more information please contact: Danny Bosker Head of M&A T: +31 (0) E: registered with the trade register in the Netherlands under number , is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. The name KPMG and logo are registered trademarks of KPMG International.